Coca-Cola said to be moving ahead with bid for GSK's Horlicks

London

THE Coca-Cola Co is moving forward with its interest in GlaxoSmithKline Plc's Indian malted milk drink company Horlicks Ltd, according to the Sunday Telegraph.

The company is making preparations ahead of a deadline for first round bids, said the newspaper, which didn't say where it got the information. The newspaper previously reported that the transaction may be valued at £3 billion (S$5.34 billion).

Coca-Cola's interest in Horlicks comes just weeks after its acquisition of UK coffee chain Costa for £3.9 billion, reflecting the company's stra-tegy to diversify away from soft drinks. The New York Times reported on Oct 2, 2015 that "over the last 20 years, sales of full-calorie soda in the United States have plummeted by more than 25 per cent".

Bill Sipper, managing partner at Ramsey, New Jersey-based Cascadia Managing Brands, a global beverage consultant, noted that Coca-Cola has been on a sweeping downward trajectory. "Almost every brand of Coca-Cola is down. Soft drinks are down. Vitamin water is down. Coconut water is down." Hence, Mr Sipper says, "In order to maintain market share, they have to buy the little guy."

Coca-Cola, its adviser Citigroup and GSK declined to comment to the Sunday Telegraph.

GSK announced a strategic review of Horlicks and other nutrition-focused products in March to potentially help fund its US$13 billion buyout of Novartis AG's stake in their consumer healthcare joint venture.

Other large consumer retail companies such as Kellogg Co, Unilever Plc, Reckitt Benckiser Group Plc, The Kraft Heinz Co and Nestle SA have also registered interest in Horlicks, according to the Sunday Telegraph, as well as private equity firm KKR & Co Inc. BLOOMBERG